Barak said he planned to set up a "government of national emergency" in the next three to four days following the latest escalation of violence in the Palestinian territories.

He described Sharon as a "very important partner" in that venture.

Barak made the announcement following a wave of Israeli air strikes against Palestinian targets in retaliation for the lynching of three soldiers by an angry Palestinian mob in the West Bank town of Ramallah.

"If peace is dead, I can see no reason why we shouldn’t have a national unity government if a conflict is imposed upon us," Barak told a subsequent interview with CNN television.

"I don't think that Likud or the right-wing in Israel is against peace. They might have certain differences with us ... but they are not anti-peace."

The television said Barak was planning to give Sharon a report on security issues.

Barak has been without a majority in parliament since before the Camp David peace summit in July and faces a possible vote for early elections when the parliament reconvenes on October 29.

The Palestinians blame the wave of unrest that has rocked the Palestinian territories for the past two weeks on a visit by the hardline Sharon to the al-Aqsa mosque compound in occupied east Jerusalem, which the Palestinians said "defiled" the site.

Al-Aqsa is the third holiest to Islam but is also sacred to the Jews, who call it Temple Mount.

Sharon, the chairman of the Likud party, has served as foreign and defense ministers in previous right-wing governments and has always expressed serious reservations about the Oslo peace accords, which gave the Palestinians autonomy -- JERUSALEM (AFP)